Customs brokers may no longer open and maintain prepayment accounts and make advance payments on behalf of their client importers, according to Customs Memorandum Order No. 18-2021, which took effect on May 24
Under CMO 18-2021, any accredited importer or exporter is given an option to open prepayment accounts as an alternative to the Payment Application Secure System Version 5.0 system required to be used by all E2M users
Accredited importers, exporters, small-value importers, and air express cargo operators may open a prepayment account depending on the type of declaration
Chamber of Customs Brokers, Inc. president Adones Carmona will request for a grace period following effectivity of CMO 18-2021 to allow customs brokers to max out their funds
Customs brokers may no longer open and maintain prepayment accounts and make advance payments on behalf of their client importers, according to a new order by the Bureau of Customs (BOC) that took effect on May 24.
Customs Memorandum Order (CMO) No. 18-2021 dated May 19 revises the rules and regulations on the opening and utilization of prepayment accounts, and aims to provide an alternative mode of payment of duties, taxes, and other charges for all goods declarations lodged in BOC’s Electronic-to-Mobile (E2M) System.
It repeals, amends, or modifies CMO 27-2014 and all other inconsistent orders, memoranda, circulars, and issuances. CMO 27-2014, issued in 2014, provides the guidelines on establishing prepaid accounts.
CMO 18-2021 covers goods declarations for consumption (formal), transit, warehousing, export, informal entry, and transshipment.
Under the new order, any accredited importer or exporter is given an option to open prepayment accounts as an alternative to the Payment Application Secure System Version 5.0 (PASS5) system required to be used by all E2M users.
For consumption, transit (including shipments from local ports to free zones), and warehousing declarations, the accredited importer can open the prepayment account. For export declarations, the accredited exporter can open the prepayment account while small-value importers and air express cargo operators can do so for informal entries.
Previously under CMO 27-2014, “importers and customs brokers may open prepaid accounts but are not obliged to do so.” The same CMO said customs brokers may use their prepaid accounts to make payments to BOC on behalf of their client-importers, subject to Section 30 of Republic Act No. 9280 or the Customs Brokers Act of 2004.
It must be noted though that Section 30 of RA 9280 identified charges that customs brokers may not advance and finance on behalf of their client-importers. These are duties and taxes, arrastre charges, wharfage dues, storage fees, and other port charges.
Chamber of Customs Brokers, Inc. (CCBI) president Adones Carmona told PortCalls in a text message he sees no problem with CMO 18-2021, pointing out that prepayment is a form of advance payment prohibited under RA 9280.
The only concern, Carmona said, is that since CMO 18-2021 already took effect on May 24, only a few days after publication, some customs brokers haven’t fully used up their prepaid accounts’ funds. He said he will be requesting BOC for a grace period to allow customs brokers to fully utilize their funds.
Under CMO 18-2021, the importer or exporter may open and maintain one or more prepayment accounts in any collection district from which he or she will specify where payment should be made on a per-transaction basis.
The prepayment account can be used to make payments in any collection district regardless of where the account was opened.
Funds in any prepayment account cannot be withdrawn but can be transferred from one prepayment account to another prepayment account that is also under the same holder’s name.
The accredited importer or exporter should download and fill out a prepayment registration form (PRF) and submit it to BOC online through the Customer Care Portal System (CCPS) or in a flash drive. BOC will then create a prepayment account for the importer or exporter and upload their signed PRF to the CCPS. The importer or exporter can then download the PRF and present it to the in-house bank, Land Bank of the Philippines (LBP), where they can make a deposit of any amount to their prepayment account.
Checking of balance can be made by inquiring with BOC’s Management Information System and Technology Group-Site Team through the CCPS or any other secured BOC prepayment online query by providing the prepayment account number and transaction dates or period covered. Previously under CMO 27-2014, checking of balance is with LBP. – Roumina Pablo